The company sold EUR2.5bn (US$3.7bn) of five-, seven- and 10-year notes, according to data compiled by Bloomberg. The Mannheim, Germany-based company originally said it would raise at least EUR1bn from five- and seven- year debt.
“The deal just shows you how strong the market is right now,” said Tatjana Greil Castro, who manages the equivalent of $1 billion of European high-yield assets at Muzinich & Co. Ltd. in London. “The company is doing all the right things from a bondholder’s point of view, but the fact it can issue 2.5 billion euros rather than just 1 billion shows the strength of demand,” said Castro, who ordered some of the bonds.
Investor demand for high-yield, or junk, debt has returned in Europe after a hiatus of almost two years. With bank rates at record lows and yields declining on investment-grade securities, investors have snapped up more than $16 billion of junk bonds in the second half, up from $4.9 billion in the first six months of the year, Bloomberg data show.
HeidelbergCement’s sale is the second-largest junk-rated debt sale overall this year in Europe.
High-yield debt is rated below Baa3 by Moody’s Investors Service and BBB- by Standard & Poor’s and Fitch Ratings.
